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Payton v Meemic Ins Co, et al (COA – UNP 7/28/2022; RB #4456)   

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Michigan Court of Appeals; Docket #357736; Unpublished 
Judges Kelly, Murray, and Borrello; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


STATUTORY INDEXING: 
Not Applicable

TOPICAL INDEXING: 
Interpretation of Insurance Contracts


SUMMARY: 
In this unanimous, unpublished, per curiam decision, the Court of Appeals reversed the trial court’s order granting summary disposition to Plaintiff Johnny Payton in his declaratory action against Defendant Meemic Insurance Company (“Meemic”), and remanded for entry of an order granting summary disposition in Meemic’s favor.  The Court of Appeals held that the vehicle Payton was operating when he crashed into a bicyclist was not covered under his automobile insurance policy with Meemic, and thus did not provide him with bodily injury liability coverage related to the crash.

Johnny Payton was operating his 2005 Chrysler Pacifica when he crashed into and injured a bicyclist, Willie King.  Payton had purchased the Pacifica three months prior to the crash, but never added it to his automobile insurance policy with Meemic.  King eventually filed a first- and third-party action against Payton and Meemic, and while Meemic paid King’s no-fault PIP benefits, it denied that Payton had any bodily injury liability coverage available for the Pacifica.  Payton proceeded to file the instant declaratory action against Meemic, arguing that the Pacifica was covered under his automobile insurance policy.  Specifically, Payton argued that the Pacifica qualified as either a ‘replacement car,’ a ‘temporary substitute car,’ or an ‘additional car’ under a policy provision which provided:

“. . . we will pay damages for which an insured person is legally liable because of bodily injury or property damage arising out of the ownership, maintenance, or use including the loading or unloading of an insured car. The insured car means: your car, which is the vehicle described on the Declarations Page and identified by a specific Vehicle Identification Number, a replacement car, a temporary substitute car, an additional car, and a trailer owned by you; and an other car, which is a private passenger car, or trailer that you or any resident relative of your household does not own, does not lease for 31 days or more, or does not have furnished or available for frequent or regular use.” 

Notably, the policy also provided that bodily injury liability coverage would be excluded if the insured was using a vehicle that was 

“1. owned, 

2.  leased for 31 days or more, or

3.  furnished or available for the frequent or regular use by you or any resident relative unless it is the vehicle described on the Declarations Page and identified by a specific Vehicle Identification Number, a replacement car, a temporary substitute car, an additional car, or trailer owned by you[.]”

Meemic moved for summary disposition, arguing that the Pacifica did not qualify as a ‘replacement car,’ a ‘temporary substitute car,’ or  an ‘additional car,’ under the policy, and that since the Pacifica was owned by Payton, the plain language of the policy excluded him from bodily injury liability coverage for the subject crash.  The trial court disagreed, denying Meemic’s motion and instead granting summary disposition in Payton’s favor.

The Court of Appeals reversed the trial court’s denial of Meemic’s motion, holding that the policy excluded bodily injury liability coverage for the Pacifica by its plain language.  The Court noted that the policy defined a ‘replacement car’ as:

‘a car, ownership of which is acquired by you after the effective date of this Policy when it replaces the vehicle described on the Declarations Page and identified by a specific Vehicle Identification Number. We must be told about it within 30 days after acquisition or no coverage is afforded under this Policy for any accident or loss[;]’ 

an ‘additional car’ as:

‘a car, other than a replacement, acquired by you after the effective date of this Policy if we insure all cars owned by you and we are notified within 30 days of such acquisition. If we are not notified of an additional car within 30 days of its acquisition, no coverage is provided under this Policy[;]’ 

and a ‘temporary substitute car’ as:

‘a car or trailer, not owned by you or any resident of your household, used when your car or trailer is out of use because of its breakdown, repair, servicing, loss or destruction.’ 

Since Payton did not notify Meemic of his acquisition of the Pacifica with 30 days of said acquisition, the Pacifica qualified as neither a ‘replacement car’ nor an ‘additional car.’  Additionally, since Payton owned the Pacifica, it not only did not qualify as a “temporary substitute car,’ it was expressly excluded from bodily injury liability coverage altogether.

Payton argued, nonetheless, that Meemic was obligated to extend to him bodily injury liability coverage for the crash because, in its adjuster’s claim log, Meemic treated the Pacifica as a covered vehicle.  The Court disagreed, noting that the plain language of the policy was solely dispositive of the entire inquiry.

“Payton does not argue that the policy language indicates that there is coverage for the 2005 Chrysler Pacifica. Instead, he directs this Court to sections of Meemic’s claims log. In the log, Meemic indicated that it was the insurer of the owner of the vehicle involved in the crash, that Payton’s policy was in effect at the time of the crash, and that it was paying PIP benefits to King because it was the highest priority insurer under the no-fault act. Payton contends that the log shows that Meemic treated the 2005 Chrysler Pacifica as a covered vehicle. We disagree. 

. . . 

Thus, notwithstanding that Meemic provided coverage for King’s first-party claim, the question of whether Meemic is also liable for King’s third-party claim turns on the language of Payton’s automobile insurance policy. Because the undisputed facts show that the 2005 Chrysler Pacifica is not an insured car under the terms of that policy, Meemic does not have an obligation to provide coverage for King’s third-party claim. The trial court, therefore, erred by denying Meemic summary disposition and by granting Payton summary disposition.” 


Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit SinasDramis.com.

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